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How to Calculate Monthly Lease Payments



  • yes residual is 22636.58

    is it better for me to pay off the dealer fees and tag fees first instead of putting all my money down as a cap reduction?

    They are saying I can't use my rebate in the net cap cost total, i can use as a cap reduction though, isn't that same thing?

    now they are charging me aqusation fees also since I found their numbers were wrong. Should i just walk away from them? they are puting some insurance fees etc in now without showing me the total selling price.
  • qbrozenqbrozen Posts: 17,148
    yes, walk away.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • Kirstie_HKirstie_H Posts: 10,824
    Totally agreed!

    Leasing can be VERY complicated and confusing, even if everything is transparent, and especially for first-time leasers. If you are not completely sure about the deal and the dealership DO NOT lease from them.

    Start over with another dealership. Feel free to come back here as many times as you need to and ask questions until you find a deal that you feel comfortable with. We have several members who are knowledgeable and willing to help you get the right deal - and thanks to qbrozen for helping this member!

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  • qbrozenqbrozen Posts: 17,148
    exactly as kirstie said... its complicated. And, unfortunately, some dealers use that to their advantage and try to make it even more complicated and confusing so they can milk you for more money. Don't let them do it to you!

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • jsl1949jsl1949 Posts: 3
    Just leased 2012 CTS Premium MSRP $49,165, total drive off $1500, 39 months, 12k, $525 including tax. Used Costco buying service. No hassle. Los Angeles.
  • pknopppknopp Posts: 13
    The problem with leasing is getting the information one needs to compare leases. It's easy to find what your interest rate will be. It's not so easy to get the money factor or residual in a lease.

    You ask the dealer what the money factor is and they look at you like you've asked them something offensive.
  • nyrgoal99nyrgoal99 Posts: 7
    edited March 2012
    I dont think this is a good deal but I want some advice

    Discounted to:$25,081
    Tax Included: $12,23

    Payment options

    371 x 36 months, 0 Down
    171.31 x 36 months, $6446.17 down

    12K miles
    Residual $17460
    4.8% financing on lease

    My feeling is that the 4.8% is high, and I dont understand the tax. 1,200 seems really high, plus I have a vehicle worth 9-10K to trade in that I do not think they factored in.

    Thoughts? What should I be getting this car for?
  • Hi all,

    I am looking to lease a 2012 lexus or audi and would like your opinions. A friend of mine just got a lexus ES 350 touring edition (MSRP 40275) for 7000$ down and 300/month. Is that a good deal? This is in New jersey. While I am currently leaning towards the lexus I want to know if the above is a good deal and if I should try to get the same.

    What are your thoughts?

    Thank you for your help.
  • Kirstie_HKirstie_H Posts: 10,824
    Since your question is about a specific vehicle, you're better off posting in our Honda CR-V Lease Questions discussion. That's where you'll see other members posting their deals on CR-V leases.

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  • Kirstie_HKirstie_H Posts: 10,824
    This topic is more for questions about how the lease deal is calculated. For specific vehicles, we have "lease questions" discussions for each make/model where you can ask about pricing, etc., for a particular model.

    Here's the Lexus ES lease discussion:

    One tip - putting $7,000 down on a lease is NOT a good idea.

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  • Thank you. I have moved it to the Lexus forum. Just out of curiosity though - what is the downside of the high down payment? Is there a difference between high downpayment + low monthly vs low (or 0) down + high monthly? The net amount will be the same right? Or is there something I am missing here?
  • Kirstie_HKirstie_H Posts: 10,824
    The high downpayment only reduces your monthly lease payment. Why do you want them to have your money instead of YOU having your money for that time, with the potential to earn interest off of it?

    But here's the big risk: if your car were to be totaled, your insurance would pay off the finance company. They would not, however, return your $7,000 downpayment to you. You would then have no car and no $7,000 for downpayment on a new car. That money is just GONE.

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  • That makes sense. Thanks. Definitely something I will keep in mind. I did think about the potential interest that could be earned but thought that with the rates so low such savings would be negligible. I thought in the deal above the low monthly was sweet enough to offset the high down.

    The totaled factor is something I did not consider. That is a huge amount to lose in the worst case scenario.

    One last question on this - the dealers who offer 0 down - how do they charge for the bank fee, acquisition fee, taxes etc. Is it all added to the monthly payments?
  • Kirstie_HKirstie_H Posts: 10,824
    I'll let someone else answer, as I'm not a leasing expert at all. I'm sure we have members around here who... know things.

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  • jwilliams2jwilliams2 Posts: 855
    One last question on this - the dealers who offer 0 down - how do they charge for the bank fee, acquisition fee, taxes etc. Is it all added to the monthly payments?

    You are correct. It is added to the cap cost and included in the payments.
  • johngettlerjohngettler Posts: 12
    Hello all,

    1. Unfortunately, there isn't a law requiring auto makers to publicly disclose their lease money factor rates (interest rate) or their residual rates 9calue of car after duration and miles are put on.) This makes it *very* difficult to compare lease incentives across different comparable makes, models and trims. I wish there were a law enacted that would force this information to be as clear as auto loan interest rates are today.

    2. Somehow, Car_man who is a "host" on these excellent Edmunds Forums, seems to thankfully have access to nearly unlimited lease money factor and residual info from most makers, and for years has been reporting very accurate information in reply to each individual request. But he is only one man, and it can take some days for him to get back to each person. I have always been super curious, Car_man, where *do* you get this information, and how come we all can't just get to the data directly? I know of course, it's not up to you, but can you give us some insight on how you gather this info? And why can't or won't just publish this extremely valuable data in an open manner? Of course, thank you for all the information that you *do* pour out every day Car_man.

    3. The best always accessible website that I have found that has a good amount of detailed lease info for many cars, is this link below (sorry Edmunds, it's from It is *not* always accurate, and should be taken with a grain of salt, but I have found it to be helpful, but not nearly as accurate as Car_man. Note that this site lists money factors as a percentages, which is actually the money factor number times 2400 (for example MF 0.0006 x 2400 = 1.44%) to get a fairly comparable number to standard auto loan interest rates. Just enter you zip, and then click into each model and trim to see detail lease info.

    4. Each dealer *should* be able to provide you MF and Residual for a specific car, with a specific lease length in months, and miles per year. But you have to "get involved" with a sales guy to begin to extract this kind of info. Ugh.

    5. There is a company called ALG that publishes a "residual guide" each quarter of what they recommend as the residual for each model and trim, after different lease lengths of time, and different mileage usage. They *will sell* you a single copy of their "Residual Percentage Guide 2012 Models National" book for about $50 by calling the number on this link, 1-805-898-8400. The manufacturers *do not* always match these residuals all the time, but it *is* a fair way to generally see what models and trims would give you a relatively cheaper monthly payment, due to holding their value better.

    Hope this helps everyone.
    John Gettler
  • Hi - I'm a first time car buyer and I'm planning to lease the Mercedes C250 Coupe. I don't believe this is a great deal, but I'd love to hear from someone about this that is far more experienced than myself:

    MSRP: $44,250 (includes multi-media, premium package, and 18" alloy wheels, keyless go)
    Residual: $30545
    Annual Miles: 10,000
    Months: 36
    Payment: $647
    Due at Signing: $1250
    Sales Tax: 1.50% = 663.75
  • Kirstie_HKirstie_H Posts: 10,824
    This is more of a general topic for asking about how to calculate leases - you might find more specific help in our Mercedes C-Class Lease Questions discussion. We'll leave your post here, but if you click on my link and post in that discussion, you might get more feedback. You can also see what other recent buyers have reported.

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  • ksrpksrp Posts: 11
    I saw the following lease ad on a manufacturer's website --

    "$199/Month, 36-Month Lease, $1,999 due at Lease Signing. Includes 1st Month's Payment and Acquisition Fee. Excludes taxes, title and fees."

    Additional details in the fine print --

    MSRP $19,550 plus destination charge of $795. Payment based on capitalized cost of $18,440. Total payments of $7,160. Purchase option at lease end of $12,004 plus tax or price negotiated at signing.


    Firstly, I want to understand how the capitalized cost was arrived at. Shouldn't the capitalized cost be 19550+795-1999 = 18346?. They are claiming it is 18440.

    Also, I want to find the MF they are using. Here's my calculation from the $199 monthly payment. The depreciation payment is (18440 - 12004)/36 = 179. That leaves $20 for the interest, so (18440+12004)*MF = 20. That makes MF = 0.000657, so interest rate = 0.000657*2400 = 1.57%

    Is this calculation correct?

    Since total payments required is 7160 and each payment is 199, they are expecting 36 payments. Then why do they claim $1999 includes the first month's payment?

    Lastly, what should I expect to pay for 'taxes, title and fees" in California?

    Appreciate any feedback.
  • dwsindydwsindy Posts: 3
    edited July 2012
    MSRP. $41735
    Sell. $40564.25
    Cap cost reduction $5250.00
    Money Factor. $.000583. (1.4%)
    Residual. $22954.25
    Payment. $446.78
    Out of pocket
    First month & ?? $814.28

    The numbers don't seem to work for me. I come up with a payment of $404 which includes the 7% sales tax. What am I missing? Doesn't the cap cost reduction come off of the sale price so the net cap is $35314.25

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